Japanese equity markets dropped sharply lower early Tuesday driven by panic selling investors after Prime Minister Naoto Kan said a “substantial amount” of radiation was leaking from a nuclear power plant. The weakness in Japan spread all over the world, sending some global markets to multi-month lows.
The fall in the price of gold and crude oil helped drive the USD CAD sharply higher Wednesday morning. After changing the trend to up on the daily chart on Tuesday following the breakout over the last swing top at 1.0215, bullish traders set their sights on the March 26th top at 1.0302. Upside momentum took this price out fairly easily, taking out stops on the penetration.
Signs of improvement in the U.S. economy helped the March E-mini S&P 500 push through recent resistance at 1112.75 to turn the main trend to up. The strong close in the Dow has this average in a position to challenge the last main top at 10434. Strong demand for technology stocks helped drive the March NASDAQ through the recent main top at 1833.00.
The EUR USD finally poked through the psychological 1.5000 barrier after several attempts failed earlier in the week. Traders took the “toe in the water” approach as this priced was reached because of the fear of a major seller up above. Traders have been reluctant to buy the Euro at current levels because they fear a verbal intervention by the European Central Bank.
